Another bill scrapping fuel taxes filed in House

MANILA, Philippines — Another bill calling for the scrapping of fuel taxes imposed under the controversial Tax Reform for Acceleration and Inclusion (TRAIN) law was introduced over the weekend in the House of Representatives.

In filing Bill 8369, Surigao del Norte Rep. Robert Ace Barbers said new and higher taxes the government started collecting in January under TRAIN have been largely blamed for record inflation or the increase in the prices of consumer goods.

He said inflation rose steadily over the past nine months since the imposition of such taxes.

“Prices of fuel have increased significantly and will be much higher on the next tranche of implementation of TRAIN in 2019 and 2020. The increase in fuel prices affects the prices of basic goods and services as producers or manufacturers may pass production costs to consumers,” Barbers said.

He added that the adjustment in January 2019 would add to inflation pressures.

TRAIN imposed an excise tax of P7 per liter or kilogram on diesel, cooking gas, kerosene and bunker oil for electricity generation. The levy is spread over three years.

The law also increased taxes on other oil products to P10 per liter, on tobacco products and on coal, another fuel for electricity production. It also levied a tax on sugar-sweetened beverages.

There are now at least four measures pending in the House calling for the suspension or scrapping of fuel taxes, a plea other sectors and business groups are supporting.

The opposition group of Edcel Lagman of Albay authored one of these measures.

Lagman urged the House leadership to consider his bloc’s Joint Resolution No. 27, which proposes the suspension of excise taxes under TRAIN.            

“It is patently a flawed policy for the Philippines, an oil-importing country, to impose additional and higher excise taxes on petroleum products, while oil producing countries are even giving subsidies to maintain at low levels the pump prices of gasoline to protect consumers,” he said.

He said the increase in the price of crude oil in the world market, which has gone beyond $80 per barrel, makes the situation worse for Filipinos.

“Assurances from the economic managers that the huge inflation rate is manageable and will be soon contained cannot lift the burden of spiraling prices of goods and services on the public, particularly the marginalized and disadvantaged sectors,” Lagman said.

Leftist congressmen have chided President Duterte’s economic managers led by Finance Secretary Carlos Dominguez III for continuing to be “on denial mode (regarding) the significant contribution of taxes under TRAIN to rising inflation.”

They lamented that despite contrary evidence, Dominguez and other members of the economic team continue to insist that such levies account for less than one percent of price increases since January.

They pointed out that in the case of fuel inflation, the excise tax plus 12-percent value added tax on diesel, for instance, amount to P3, or 30 percent of the P9-P10 total price adjustment this year.

Congressmen belonging to the Liberal Party also reiterated their call for the suspension of oil taxes.

“Clearly, now is a time of solutions: concrete, immediate and devoid of the usual politicking. We propose that government make rice available to all. Do away with the exorbitant NFA (National Food Authority) retailers’ fees for the sale of NFA rice in the supermarkets. Stop the implementation of the second tranche of fuel excise tax,” the LP lawmakers said in a statement.

Fuel tax suspension

Senate President Vicente Sotto III said that he is open to calls to suspend the next round of increases in the excise tax on fuel as long as the proponents could show that this would be able to bring down pump prices.

The TRAIN law raised the excise tax on fuel this year and another round of increases is set for January next year.

Senator Aquilino Pimentel III said the law has a provision that would automatically suspend the implementation of the next round of increases if the price of crude oil hits the $80 per barrel level for three months.

Pimentel said that he personally supports the proposals to suspend the implementation of the next round of increases in the excise tax on fuel.

Meanwhile, Senator Sonny Angara called on the Department of Energy (DOE) and the Department of Justice (DOJ) to activate the task force mandated to investigate unreasonable increases in the prices of petroleum products in the country.

Angara made the call in response to reports that pump prices were excessively jacked up in parts of the country.

It was reported that in Odiongan, Romblon, some gas stations were selling gasoline at P71.17 per liter and diesel at P57.46 per liter.

Similar reports came out in Laoag, Ilocos Norte where gasoline was reportedly being sold at P62.70 per liter.